2010 (9) TMI 1022 - AT - Customs

Misdeclaration of value and description of imported goods - Paper Phenolic Copper Clad Laminates C Grade/rejects - confiscation - redemption fine - penalty - Held that - Though it would prima facie appear that R.R. Enterprises innocently declared the description and value of the goods on the basis of documents like invoice, packing list and certificate of origin supplied by SIPL (Singapore trader), the subterfuge becomes evident from a document successfully retrieved by the Revenue from the Korean manufacturer through steamer agent. This document is commercial invoice dated 28-9-2000 available at page 36 of paper book Volume - II - The commercial invoice dated 28-9-2000 of Doosan Corporation Electro-Materials BG is a document duly signed by the manufacturer and, moreover, it is a document wherein all the material particulars of the goods were clearly indicated. For these reasons, we are not impressed with the submissions made by the ld. Counsel against acceptability of the commercial invoice as evidence for the Revenue. The alternative plea for re-export - Held that - We are not impressed with the alternative plea for re-export. This is because the goods covered by the live Bill of Entry are tainted goods, the description and value of which were wilfully misdeclared by the importer. These are goods covered by Section 111(m) of the Customs Act. It is settled law that any goods imported in breach of any prohibition or restriction would be liable to confiscation and the importer liable to penalty. Appeal disposed off - matter on remand to decided certain issues like past imports, imposition of penalty u/s 112 of CA.

Issues Involved:
1. Confiscation of imported goods and imposition of redemption fine.
2. Demand for recovery of differential duty and interest.
3. Imposition of penalties on the importer and its Managing Partner.
4. Admissibility of evidence obtained through steamer agents.
5. Plea for re-export of the goods.

Issue-wise Detailed Analysis:

1. Confiscation of Imported Goods and Imposition of Redemption Fine:
The Commissioner confiscated Paper Phenolic Copper Clad Laminates valued at Rs. 20,97,000/- imported under Bill of Entry No. 726 dated 14-11-2000 under Section 111(m) of the Customs Act, 1962, due to misdeclaration of the goods as "C grade/rejects" instead of prime quality. The importer was allowed to redeem the goods on payment of a fine of Rs. 5,24,250/- under Section 125 of the Customs Act. The Tribunal found that the description and value of the goods were misdeclared based on a commercial invoice from the Korean manufacturer obtained through a steamer agent. The Tribunal upheld the confiscation but reduced the redemption fine to Rs. 2 lakhs, finding the original fine excessive.

2. Demand for Recovery of Differential Duty and Interest:
The Commissioner demanded recovery of differential duty of Rs. 29,91,431/- on goods imported under Bills of Entry No. 303 dated 12-5-2000 and 589 dated 7-10-1999, citing misdeclaration and undervaluation. Additionally, interest on the differential duty amounting to Rs. 35,61,148/- was demanded under Section 28AB of the Customs Act. The Tribunal observed that the evidence for past imports was insufficient to support the findings of misdeclaration. The Tribunal set aside the demand for differential duty and interest for the past imports, citing lack of concrete evidence.

3. Imposition of Penalties on the Importer and its Managing Partner:
The Commissioner imposed a penalty of Rs. 35,61,148/- on the importer under Section 114A of the Customs Act and a personal penalty of Rs. 3,63,993/- on the Managing Partner under Section 112(a) of the Act. The Tribunal upheld the penalty under Section 114A for the live consignment but remanded the case to the Commissioner for quantification of the penalty, as there was no specific quantification of duty for the live consignment. The Tribunal allowed the appeal of the Managing Partner, stating that without a penalty on the partnership firm under Section 112, the Managing Partner could not be penalized under the same provision.

4. Admissibility of Evidence Obtained through Steamer Agents:
The Tribunal addressed the admissibility of documents received through steamer agents, which were not authenticated as required under Section 139 of the Customs Act/Section 78(6) of the Evidence Act. The Tribunal held that Section 139 is applicable to prosecution proceedings before criminal courts and not to the present proceedings. The commercial invoice from the Korean manufacturer was considered valid evidence despite the lack of formal authentication, as it was a signed document with clear material particulars.

5. Plea for Re-export of the Goods:
The importer requested permission for re-export of the goods, citing a letter from the Singapore trader acknowledging an error in shipping prime material instead of C grade/rejects. The Tribunal rejected this plea, referencing the Supreme Court's ruling in the case of Grand Prime Ltd., which held that tainted goods liable to confiscation under Section 111(m) should not be allowed for re-export and must be dealt with according to law within the country.

Conclusion:
The Tribunal sustained the Commissioner's decision regarding the live consignment, except for reducing the redemption fine and remanding the penalty quantification under Section 114A. The appeals concerning past imports and the Managing Partner were allowed due to insufficient evidence. The plea for re-export was rejected, aligning with legal precedents.

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